In a push to tamp down health care costs in Minnesota, Gov. Tim Pawlenty Tuesday proposed changes that would allow Minnesotans to purchase out-of-state health policies and let for-profit insurers into the Minnesota market.

The plan would also use co-pays and higher deductibles to steer lower-income people on Medical Assistance and MinnesotaCare toward state-approved clinics -- a move Pawlenty said could trim state costs by $100 million a year.

"Governor Pawlenty's 'health care reform initiatives' are not focused on lowering the cost of health care, but are another feeble attempt to look like he is doing something to solve the problem," said Sen. Linda Berglin, DFL-Minneapolis, who leads Senate DFLers on health care.

Republicans have tried and failed for years to change the state law that prohibits for-profit and out-of-state insurers from doing business in the state.

Out-of-pocket costs

A key state legislator on health issues, Rep. Tom Huntley, D-Duluth, characterized Pawlenty's proposals as "pretty small, and probably not targeted very well."

Pawlenty unveiled his plans the same day a key U.S. Senate committee approved a massive federal health care bill to overhaul the nation's $2.5 trillion medical system.

Pawlenty said his proposal would impose up-front, out-of-pocket costs for those on Medical Assistance and MinnesotaCare and issue debit cards to cover most of those costs. Money left over could be spent on non-prescription medications, eyeglasses or other care not covered by the state programs, Pawlenty said.

His proposals, he said, would foster competition and might lower costs to individuals -- points disputed by critics.

"The problem with co-pays and deductibles is that they do discourage people from getting medical care," Huntley said. "That's probably OK for most younger men, but our big cost is people with disabilities, and if they don't get proper medical care, we get very, very big costs."